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Weekly Outlook of Financial Markets for February 4-8

February 3, 2013

Major commodities prices including oil, gold and silver continued to trade up during last week while certain other commodities such as natural gas fell. Next week several reports, decisions and events may affect the financial markets. These include: ECB and BOE rate decisions, Canada’s trade balance, RBA rate decision, China’s trade balance, U.S non-manufacturing PMI, Japan’s current account, Australia’s retail sales, U.S trade balance, Spain’s unemployment rate, and U.S. jobless claims. Here is an economic news calendar projection for February 4th to February 8th regarding the U.S, Japan, EU, Canada, China, Australia and Great Britain.

(All times GMT):

Monday, February 4th

08:00 – Spain’s unemployment Change: the number of people unemployed in Spain fell last month by 59k. This mean, the employment situation in Spain has slightly improved. If in the upcoming report this trend will continue, it may positively affect the Euro;

15:00 – U.S Factory Orders: This report will show the shifts in U.S. factory orders of manufactured durable goods during December; in the latest report factory orders remained unchanged; this report will offer some insight to the progress of the U.S economy and could affect the path of the U.S dollar;

02:30 – Australian Trade Balance: The upcoming report will refer to December 2012. In the previous update, regarding November, the seasonally adjusted balance of goods and services expanded its deficit to $2,637 million. The export of non-monetary gold fell by $144 million; if the gold exports will continue to fall in December, it might suggest a decrease in demand for non-monetary gold (see here last report);

05:30 – Reserve Bank of Australia – Cash Rate Statement: as of the previous month, the overnight money market rate of Australia’s Reserve Bank was kept unchanged at 3%, which is still the lowest level since the end of 2009. RBA cut the rate a few times during 2012. If the RBA will decide to cut its rate again, this news may affect the Australian dollar that is strongly linked with commodities prices;

Tuesday, February 5th

11:00 – Euro Area Retail Sales: This monthly report will present the changes in EU retail sales for December. In November 2012, retail sales inched up by 0.1%; if this report will continue to show a rise in sales index, it might strengthen the Euro;

15:00 – U.S. ISM Non-Manufacturing PMI: This report will refer to the developments in the non-manufacturing sector during January 2013. During December 2012 this index rose to 56.1% – this means the non-manufacturing is growing and at a faster pace than in the previous month; this index may affect forex and commodities trading;

00:30 – Australian Retail Sales: The upcoming report will refer to December 2012. In the previous update, the seasonally adjusted retail sales inched down by .01% during November; this news may affect the Aussie dollar;

Wednesday, February 6th

11:00– German Factory Orders: This report will refer to the changes in the factory orders of Germany for December; in the previous report the German factory orders fell by 1.8% (M-o-M);

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will come out with its weekly report on the U.S oil andpetroleum stockpiles for the week ending on February 2nd; in the latest update for January 25th, stockpiles rose by 2.2 ml bl to reach 1,798.7 ml bl.

02:30 – Australia Employment Report: in the last report regarding December 2012 the rate of unemployment declined to 5.4%; the number of employed (seasonally adjusted) fell by 5,500 people; the number of unemployed rose by 16,600 during December compared to November. This report could affect the Aussie dollar (see here the recent report);

Thursday, February 7th

09:00 – Swiss National Bank Foreign Currency Reserve: The Bank will publish its current Foreign Currency Reserve; according to the previous update, the forex reserves rose compared to the previous week;

09:30 – Great Britain Manufacturing Production: this report will show the yearly rate of GB’s manufacturing production for December; in the previous report regarding November the index decreased by 0.3% (M-2-M); this news may affect the British Pound;

Tentative – French 10 Year Bond Auction: the French government will have monthly bond auction; in the latest bond auction, which was held during the first week of January, the average rate reached 2.07% – the lowest rate in recent months;

12:00 –Bank of England Rate Decision & Asset Purchase Plan: Bank of England will announce its basic rate for February 2013 and of any developments in its asset purchase plan; as of January BOE kept rate unchanged at 0.5% and the asset purchase plan was left at £375 billion;

12:45 – ECB Press Conference and Euro Rate Decision: Back in July 2012 the ECB lowered its cash rate by 0.25pp to 0.75%. Since many continue to speculate when will the ECB lower the rate again because: the economic situation in EU isn’t improving; the inflation and monetary development aren’t growing. Thus, the ECB might lower the rate by another 0.25pp in the near future. If ECB will cut the rate again, it may pull down the Euro to US dollar exchange rate;

13:30 – U.S. Jobless Claims Weekly Report: this report will refer to the weekly developments in the initial jobless claims for the week ending on February 2nd; in the latest report the jobless claims rose by 38k to reach 368k; this upcoming weekly report may affect the U.S dollar and consequently commodities;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly report of the U.S. natural gas market will pertain to the recent changes in natural gas production, storage, consumption and rates as of February 2nd; in recent weekly report, natural gas storage declined by 194 Bcf to 2,802 Bcf;

00:50 – Japan Current Account: this report will show the shifts in the difference between exports and imports for Japan during the previous month; this news may affect the strength of the Yen;

Tentative –China’s Trade Balance: as of the latest monthly update, China’s trade balance rose to a $31.6 billion surplus; if the surplus will further rise, it could indicate that China’s economic growth is progressing and thus may positively affect prices of commodities.

Friday, February 8th

05:30 – China’s CPI: during December the Chinese inflation rate rose to an annual rate of 2.5%; this rate is well below China’s inflation target of 4% in annual terms. If the inflation will continue remain low, it could indicate that China’s economic progress isn’t expanding; China is among the leading countries in importing commodities such as gold and oil;

13:30 – Canada’s Employment Report: In the recent employment update for December 2012, unemployment edged down to 7.1%; the employment rose by 40k during the month. The upcoming report might affect the Canadian dollar and consequently the prices of commodities;

13:30 – Canadian Trade Balance: In the recent report regarding November 2012, exports fell by 0.9% and imports rose by 2.7%; as a result, the trade deficit expanded from a $552 million deficit in October to $2 billion deficit in November; this report may affect the Canadian dollar which tends to be strongly correlated with prices of commodities;

13:30 –American Trade Balance: This monthly report for December will show the recent developments in imports and exports of goods and services to and from the U.S, including commodities such as oil and natural gas; according to the previous American trade balance report regarding November the goods and services deficit increased during the month to $48.7 billion;

Tentative – China New Loans: This report will pertain to the recent developments in China’s new loans given during the previous month. According to the recent report, the total loans changed direction and fell; this report is another indicator to the economic progress of China;